February 15, 2011 - Philip Morris Fortune Tobacco Corp. Inc (PMFTC) appealed yesterday, February 14th to the government to keep the present tax system for cigarettes. In a press conference, PMFTC president Chris Nelson said the current system is working because the Bureau of Internal Revenue (BIR) even managed to exceed their P25.9 billion target for the tobacco industry alone.

Nelson said that BIR (Bureau of Internal Revenue) was able to collect P31.6 billion (1 USD = 43.7500 PHP) in tobacco taxes last year. This is 32 percent better than the P23.9 billion collected in 2009. “This clearly shows that the system works,” Nelson stressed.

Nelson said that the excise tax system that mandates increase in taxes every other year has worked well that is why this is not the time to change. He likewise said that there is no significant underdeclaration in the industry. He said these claims have been unsubstantiated and is totally baseless.

The current law, Republic Act (RA) 9334, is expiring this year and legislators are scrambling for their own House measures seeking to replace the old one. (Republic Act (RA) 9334, December 21, 2004 - an act Increasing the Excise Tax Rates imposed on Alcohol and Tobacco Products, amending for the purpose sections 131,141, 142, 143, 144, 145 and 288 of The National Internal Revenue Code of 1997, as amended

Nelson said it would be better to extend the system for another five to six years instead of completely restructuring it.

Nelson said that the tobacco industry has been flourishing and the gains in the industry are being passed on to tobacco farmers. “The farmers are growing more tobacco. The industry is in good shape.” The number of tobacco farmers has grown by 10 percent last year. There are 43,500 tobacco farmers.

He stressed that tobacco growing is an important trade in the country.Last year, the industry produced 110 billion sticks and the local leaf growers were only able to supply 35 percent to 40 percent of the demand. The rest are imported. Nelson said this data just proves that the opportunity for local tobacco farmers are great and they need support from both the industry and the government.